File photo Average farmland prices in southwest Minnesota increased nearly 28% last year.

WORTHINGTON — Average farmland prices in southwest Minnesota increased nearly 28% last year, reaching a new high, data from an annual University of Minnesota Extension survey said.

The average farmland price across a 14-county area in southwest Minnesota went from $6,780 an acre in 2021 to $8,673 an acre in 2022, the survey said. That was an increase of 27.9%, compared to an increase of 6.4% in 2021.

The 2022 average farmland price surpassed the old high of $8,466 an acre in 2013, said David Bau, Extension educator in ag business management at the U of M Extension regional office in Worthington.

“These higher land prices are occurring across the region with high corn and soybean prices the last two years,” Bau said. Higher corn prices were also linked with higher average land prices a decade ago, he said.

“Usually a 1% to 2% change would have been normal until we experienced $6.00 average corn price for three years in 2011, 2012 and 2013,” Bau said.

In Lyon County, the average farmland sale price in 2022 was $8,787 an acre, compared to $6,902 in 2021.

The annual Extension survey collects data on sales of bare farmland, to people who were not related to each other, in the first six months of the year. Data on the 2022 survey was released in January.

While overall average land prices in the region increased from 2021 to 2022, not every county saw prices increase. Prices went down in two counties, Chippewa and Pipestone County. There was also a lot of variability in the amount that average prices changed between 2021 and 2022.

Survey data said Cottonwood County had the biggest average farmland price increase, at 86.77%. Meanwhile, Pipestone County had the biggest decrease, at 8.1%.

Nobles County had the highest average sale price, at $11,025 per acre. Chippewa County had the lowest average sale price, at $6,333 per acre.

A lot of factors can affect average land prices from year to year, an Extension news release said. The quality of the land sold within a county could be part of the reason for the wide swing in prices from year to year in individual counties. The number of sales in each county also varies from year to year.

Changes in farm incomes, grain prices, interest rates and more can also factor into land values, the Extension release said. Average farm incomes improved from 2019 through 2021, and were projected higher in 2022.

Average southwest Minnesota land prices have fluctuated over the past several years, survey data said. Land values had been increasing until 2013’s peak, and then declined and continued down to $6,340 an acre in 2017, an Extension news release said. The average price went up to $6,589 in 2018, but declined again through 2020. The 2022 average farmland price of $8,673 an acre was a new high.

Copies of the summary report for the farmland sales would be available at county Extension offices in Chippewa, Cottonwood, Jackson, Lac qui Parle, Lincoln, Lyon, Martin, Murray, Nobles, Pipestone, Redwood, Rock, Watonwan and Yellow Medicine Counties, the Extension news release said.